AG is asked to draft property tax law

The Cabinet is understood to have given formal approval yesterday to Attorney General Máire Whelan to draft legislation for the introduction of a controversial property tax.

As the Cabinet met to discuss the budget, Labour Party Oireachtas members say they have been advised to expect cuts of €10 to the universal rate of child benefit on December 5th.

The Cabinet held its first meeting to discuss the budget at Government Buildings yesterday afternoon, and Ministers will resume their deliberations this morning.The other main agenda item for Ministers was the estimates of expenditure for each department.

There has already been a series of bilateral meetings on estimates between members of the Cabinet with Minister for Public Expenditure and Reform Brendan Howlin.

These are said to have gone “fairly smoothly” as a result of the spending ceilings set out in the three-year Comprehensive Review of Expenditure completed last year.

Earlier, Minister for Finance Michael Noonan met members of the Fine Gael parliamentary party, but this was described as a “listening exercise” for the Minister, who confined his remarks to the economic context of the budget.

Tánaiste Eamon Gilmore told the parliamentary Labour Party yesterday that the Economic Management Council’s budgetary discussions were “intense in the extreme”, according to some of those present.

Budget discussions

Budget discussions have remained largely within the confines of the council, which comprises Taoiseach Enda Kenny, Mr Noonan, Mr Gilmore and Mr Howlin.

Ahead of last year’s budget, Minister for Social Protection Joan Burton calculated reducing the rates of child benefit by €10 per month per child would save €138 million a year.

Fianna Fáil finance spokesman Michael McGrath said in a statement that “people will be quite surprised to hear that the Cabinet is only collectively considering the budget measures for the first time now, one week before it is to be delivered”.

Sinn Féin finance spokesman Pearse Doherty said there was “excessive secrecy” over the preparation of the budget.

Chief executive of the Irish Tax Institute Mark Redmond said the property tax “must bear in mind people’s ability to pay”. Taxpayers had already taken “significant hits” to their disposable income – the universal social charge, increased VAT and the household charge.

‘Learn the lessons’

“We must learn the lessons of the household charge and the lessons of the previous residential property tax that we had from 1983 up to 1997.”

This had ended up being largely a Dublin-based tax.

“About 20,000 householders paid it because the base was too narrow. The income and valuation thresholds were too high. In relation to the household charge, the lesson that we learned from that one is that the new property tax needs to be as simple as possible for people to pay, and they need to understand when and how they should pay it.”